What this biotech's $85 million IPO tells us about raging against aging

Promising to roll back cellular time, aging-related drug-development company Unity Biotechnology Inc. hit the market with its stock Thursday after raising $85 million in an initial public offering.

The 70-employee Brisbane company (NASDAQ: UBX) is one of the first "aging" companies to go public, hitting the mid-range of its IPO target by selling 5 million shares at $17 per share. But how the fourth Bay Area life sciences IPO performs in the first days, weeks and months — and how the company's experimental drugs behave in early clinical trials — will say a lot about investors' appetite for companies with little current clinical data but broad promises to treat diseases of aging.

The field has invited a number of potential powerhouses, pretenders and hopefuls — from former Genentech Inc. CEO Art Levinson's Google-based Calico in South San Francisco to BioTime Inc. subsidiary AgeX in Alameda — against the backdrop of an aging baby boomer population.

Unity's initial targets, including a drug to treat osteoarthritis, zero in on a process known as senescence. That natural process is when cells permanently stop dividing, start accumulating and start secreting proteins that are believed to cause inflammation, fibrosis and other aging processes in nearby healthy tissue as well as ignite senescence in neighboring cells.

Unity's drugs are designed to stop the process by blocking those proteins and, as a result, slowing, halting or reversing certain diseases of aging.

Unity attracted high-profile venture investors, including the investment unit of Amazon Inc. founder Jeff Bezos, while rolling up more than $200 million in venture funding since it was incorporated in March 2009. Its other large investors include ARCH Venture Partners at 27 percent ownership prior to the IPO, a venture fund from China-based contract research organization WuXi PharmaTech, venture capital firm Venrock, the Mayo Clinic, the Baillie Gifford investment management firm of the United Kingdom, and Fidelity Investments.

Yet like aging, developing drugs for aging-associated diseases is a long process where a lot of cash is dropped along the way. Unity is entering the clinic with its osteoarthritis drug, called UBX-0101, but it will take years for it to wend its way through the three-phase Food and Drug Administration drug-approval process. The company had burned through $87 million, almost half of that last year.

Unity, led by CEO Keith Leonard, was founded scientifically by Judith Campisi of Novato's Buck Institute for Research on Aging and the Lawrence Berkeley National Laboratory, Jan van Deursen of the Mayo Clinic College of Medicine and Dr. Daohong Zhou. Campisi showed in 2008 that senescent cells produce damaging proteins, the same year that van Deursen showed that mice engineered to produce large amounts of senescent cells aged rapidly, and Zhou showed at the University of Arkansas for Medical Sciences in 2015 that a single drug-like molecule could eliminate senescent cells.

Some $10 million to $20 million from the IPO — expected to net $87.9 million after underwriters exercise their options to buy another 750,000 shares — is aimed at guiding UBX-0101 through a Phase I safety and tolerability study. The study, which is enrolling 40 people, is expected to produce results in first-quarter 2019.

Another small-molecule Unity drug — UBX-1967, matching the year of cofounder and President Nathaniel "Ned" David's birth — targets members of a protein family that help senescent cells survive. Its initial target is eye diseases, starting with a trial in the second half of 2019. It will get $15 million to $20 million from the IPO to prepare it and pay for a Phase I trial.

UBX-1967 is licensed from China's Ascentage Pharma Group Corp. Ltd. for all fields outside of cancer. Ascentage could get $38 million in milestone payments and received 133,333 shares of common stock as an upfront license fee, with 20 percent of those shares going to the University of Michigan to pay a related sublicense fee.

Some $30 million to $50 million from the IPO is earmarked for developing Unity's pipeline of senolytic drugs.